Waste Management Cabinet Panel 11 January Minutes

MEMORANDUM 28/04/11 ______

To: All Members of the Panel From: Legal, Member & Statutory Richard Brown, Ray Greenall, Services John Wood Ask for: Fiona Corcoran Ext: 25560 My ref: Your ref:

WASTE MANAGEMENT CABINET PANEL 28 APRIL 2011

MINUTES

ATTENDANCE MEMBERS OF THE PANEL

D A Ashley (Chairman, Executive Member, Environment, Planning and Waste), D Andrews, M Bright, G R Churchard, K F Emsall (substitute for P J Bibby), M J Frearson, D E Lloyd (substitute for C Clapper), M D R Muir, J M Pitman (substitute for T J Price), I M Reay (Vice-Chairman, Deputy Executive Member, Environment, Planning and Waste), R M Roberts, D T F Scudder, W A Storey (substitute for C B Wyatt-Lowe), S J Taylor, R A C Thake

Other Members present:

F Button, C Clapper, R I N Gordon, C M Hayward, T C Heritage, D J Hewitt, S M Holmes, T W Hone, A Lee, S Markiewicz, S J Pile, S Quilty, A M R Searing

Upon consideration of the agenda for the Waste Management Cabinet Panel meeting on 28 April 2011, as circulated, conclusions were reached and are recorded below:

PART I

1. MINUTES

The minutes of the meeting held on 1 February 2011 were confirmed as a correct record.

2. PUBLIC PETITIONS

John Webb presented a petition and addressed the Panel requesting that the County Council withdraws its proposals to build an incinerator and requesting that the appointment of preferred bidder be deferred for a month:

"We request that Hertfordshire County Council withdraws its proposals to build an incinerator as the solution for dealing with 40-50% of our household waste. We believe that aiming for recycling levels of 70% and higher as Surrey County Council are doing and using less expensive, more environmentally benign waste treatment technology would recover more materials, and provide cleaner energy than that 110428 Waste Management Cabinet Panel minutes 1 MEMORANDUM 28/04/11 ______

produced by incineration, thus reducing the carbon impact and reducing the cost to the taxpayer, making it better value for money."

D A Ashley received the petition.

3. HERTFORDSHIRE WASTE PROCUREMENT PROGRAMME

[Officer contact: Bryony Rothwell, Programme Manager Tel: 01992 588350]

Prior to the Panel’s consideration of this item of business the Chief Legal Officer made the following statement:

“The function of the Cabinet Panel today is to make a recommendation to Cabinet concerning the preferred bidder for the Waste Procurement Programme and the authorisation of the award of the contract to the preferred bidder taking into account the information before it (which does not include the financial information in the Part II Cabinet Paper.)

Cabinet will be considering the appointment of the Preferred Bidder and the authorisation of the award of the contract to the preferred bidder at its meeting later today and will have additional information in front of it which it will need to consider in coming to its decision. Members of the Panel who are also on Cabinet must keep an open mind and when at Cabinet must consider all of the information before Cabinet and all other relevant factors in reaching their decision.”

3.1 The Panel considered a report providing an update on progress with the Hertfordshire Waste Procurement Programme and details of the analysis of final tenders submitted by E.ON Energy from Waste AG and Veolia ES Aurora Limited; and information to support the recommendation to proceed to consider the appointment of a preferred bidder for the project and the process to award the PFI contract.

3.2 The Panel noted that a petition relating to this item had been presented at County Council on 18 February 2011.

3.3 Members discussed the capacity of the proposed Energy From Waste (EFW) facility and the potential impact of recycling and noted that more than 70% of domestic waste could be recycled without falling below the guaranteed minimum tonnage level to be included by the proposed contract. Members were also offered assurance from officers that the County Council would continue to promote and encourage recycling in the county and it was highlighted that there was an agreement with district and borough councils (the Alternative Financial Model), which ensured that recycling was higher up the waste hierarchy than 110428 Waste Management Cabinet Panel minutes 2 MEMORANDUM 28/04/11 ______

recovery.

3.4 Members asked if the chosen bidder would be satisfied to operate at the minimum tonnage levels or whether they would wish to take waste from elsewhere in order to use remaining capacity. The Panel noted that there was a guaranteed minimum tonnage and the operator would deal with the County Council’s waste as a priority. In addition to this waste there is 2 million tonnes/annum of commercial and industrial waste produced in Hertfordshire, which the county had been encouraged to be self-sufficient in dealing with.

3.5 In response to concerns raised by a Member that alternatives to EfW had not been fully and proactively explored, it was highlighted that at the initial analysis stage of the Procurement Programme, the Panel had received feasibility studies and were made aware that a whole solution to provide long term treatment would be needed. A range of solutions were considered and it was found that EfW was likely to be the best option. One of the alternative technology options, Mechanical Biological Treatment (MBT), was not considered to be suitable because it would not offer a complete solution, reducing the amount of waste by 30-40% but leaving a substantial residue, which would then need to be sent to landfill or burned. It was also noted that all bidders had been asked to provide the best options to meet the County Council’s needs and none had offered a multi-site solution.

3.6 In discussion, a Member of the Panel highlighted that they felt the benefits to the community of Hatfield had not been illustrated and that local people’s views and responses to the consultation had not been taken into account. Members heard that there had been 11,000 responses to the consultation on the draft Joint Municipal Waste Management Strategy 2007, which had provided a clear indication that the public wanted to get energy output from waste that cannot be recycled. Consultation with the local community and a wider consultation across the county would be carried out as part of the planning application process.

3.7 With regard to the PFI programme, it was noted that it had been reviewed by the Government and the current provisional position was that the County Council would secure £115.3 million of approved PFI credits and a value of £216.8 million in credits over the life of the contracts to contribute to the cost of the facility.

3.8 A Member of the Panel suggested that the decision to appoint a Preferred Bidder should be deferred or there should be a moratorium. In response, the Panel heard that although the Government was due to produce a review of the National

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Waste Strategy in June/July, a recent statement from Ministers had given clear assurance to the County Council that making a decision on the Preferred Bidder today would in no way compromise or be compromised by the new waste strategy. Paragraphs 12.1 and 12.2 of the report, regarding alternative options, were also highlighted to Members.

3.9 In relation to emissions, the Panel were advised that legislation was in place and would be operated by the Environment Agency (EA) and monitored in real time on an hourly basis with data made available to the EA at any time. It was noted that in the event of a breach on emissions the permit could be withdrawn by the Environment Agency at any time. Members were informed that technical advisers had confirmed that EfW technology would not be harmful to human health. Legislation in the UK requires tipping to be carried out in an enclosed space and the tipping hall in the EfW plant operates with negative air pressure to reduce odours and vermin.

3.10 In response to a request from a Member, the Panel were advised that Hampshire had invested in an EfW programme 3 years ago and this had not had a negative impact on the recycling rates in the county. Other examples were given of countries such as Austria, Germany and the Netherlands, with the highest recycling rates in Europe that also use EfW technology.

3.11 Members discussed the impact of increased traffic, particularly heavy goods vehicles, in the roads surrounding the sites and acknowledged concerns raised by people living locally to both sites. Members noted that bidders had considered traffic and transport and were aware of these concerns and that the likely traffic increase at either site was estimated to be less than 3% increase to current levels. Transport issues would also have to be considered as part of the planning process.

3.12 In relation to the output from the EfW plant, it was noted that this material would be ash and 3-4% of it would go to landfill while the rest would be recycled. The ash could be put in to landfill without detriment to the environment and did not need treating, but it would need to go to a specific type of landfill.

3.13 S Markiewicz, local member for Welwyn Garden City South, addressed the Panel, highlighting the issues of his constituents and asked Members to take this into account when considering their recommendations.

3.14 Regarding the procurement process and in response to Members’ questions, the Panel noted that there would be costs to the County Council if the procurement process was not taken any further, although there would be no liability to the

bidders with regard to cost at this stage as no contracts had been signed. The Panel was advised that if the procurement process was abandoned without good reason, the bidders may be able to legally challenge the County Council. In discussion however it was noted that these factors were not driving the process.

3.15 The Panel noted that an Equalities Impact Assessment had been carried out and would be considered in Part II.

3.16 Members discussed the covenant restricting use of the New Barnfield site and were informed that the County Council could use appropriation powers to override the covenant and that the Homes & Communities Agency were aware of this.

3.17 C Clapper, local Member for Watling, addressed the Panel on behalf of her constituents, giving reasons why she considered Harper Lane to be an unsuitable site, such as its location on Green Belt land, traffic issues, the close proximity to a hospital and school for autistic children and the wildlife trust nature reserve nearby.

3.18 S Pile, local Member for Hatfield South, addressed the Panel to oppose the EfW being built at New Barnfield due to the fact it was located on Green Belt land and there were a number of footpaths and rights of way running across the site. He also highlighted the impact on wildlife, traffic issues and disruption to children attending Southfields Special School which is located next to the site. He informed the Panel that all Welwyn Hatfield Borough Council Members were opposed to the EfW facility being located at the New Barnfield site.

Conclusions

3.19 The Panel recommended to Cabinet that, having considered the matters set out in this report and the issues that had been raised during the Programme, Cabinet proceeds to appoint the Preferred Bidder for the Hertfordshire Waste Procurement Programme as set out in the Part II papers and, subject to the matters mentioned in the Part II papers, authorises the award of the contract to the Preferred Bidder.

At the request of M J Frearson and S J Taylor, it is recorded that they voted against the recommendation.

The Panel recommended to Cabinet:

3.20 That, on the basis of the information before the Panel and subject to consideration of the financial and other commercial implications of the Final Tender submitted by the Preferred Bidder set out in a separate report before Cabinet, it is recommended that Cabinet;

a. approves the appointment of Veolia ES Aurora Limited as preferred bidder on the basis that their final tender is the most economically advantageous tender as defined in the evaluation criteria; and

b. subject to the matters set out in recommendations 3.21, 3.22, 3.23 and 3.24 authorises as set out in 3.27:

i) the award of the contract to Veolia ES Aurora Limited in the form set out in Veolia ES Aurora Limited’s final tender as fine tuned and clarified; and

ii) the entering into by the County Council of the Private Finance Initiative (PFI) contract with the special purpose vehicle to be formed by Veolia ES Aurora Limited, Veolia ES Hertfordshire Limited, and all associated ancillary, project and property documents together with any additional acts and instruments required to give effect to the project; and

3.21 That the Director Environment & Commercial Services be authorised in consultation with the Executive Member for Environment Planning and Waste to sign a preferred bidder letter confirming the appointment of Veolia ES Aurora Limited as preferred bidder; such letter being in a form approved by the Director Environment & Commercial Services in consultation with the Chief Legal Officer; and

3.22 That the Director Environment & Commercial Services be authorised with the Project Board and Project Team to conduct clarification, confirmation of commitments and due diligence with Veolia ES Aurora Limited in accordance with the Public Contracts Regulations 2006; and

3.23 That the Director Resources & Performance in consultation with the Director Environment & Commercial Services be authorised to discuss as part of clarification and confirmation of commitments and if considered appropriate to manage the county council’s foreign exchange exposure to reach agreement with Veolia ES Aurora Limited to hedge against foreign exchange (FOREX) changes and that such process is followed with sufficient due diligence to ensure a robust and satisfactory position is reached in relation to FOREX whilst ensuring that every effort is made to minimise the impact on the county councils budget; and

3.24 That prior to financial close the Director Environment & Commercial Services in consultation with the Director Resources & Performance, Executive Member Environment Planning & Waste and Executive Member Resources and

Economic Wellbeing be authorised to finalise and submit a Final Business Case to Defra; and

3.25 That officers bring to Cabinet reports with reference to the relocation of the Central Library Services, the Park ESC and, should it become necessary, Southfield School as soon as possible.

3.26 That the county council lease the New Barnfield site to Veolia ES Hertfordshire Limited on the terms set out in the Invitation to Submit Final Tenders subject to any amendments approved by the Director Resources & Performance in consultation with the Executive Member Resources and Economic Wellbeing for the duration of the Contract; and

3.27 That subject to the satisfactory conclusion of the matters referred to at recommendations 3.21, 3.22, 3.23, and 3.24 and approval by Defra of the Final Business Case, the Director Environment & Commercial Services in consultation with the Executive Member for Environment Planning and Waste be authorised to;

a. approve the entering into the PFI contract with Veolia ES Hertfordshire Limited and all associated documents (including the necessary lease, parent company guarantee, collateral warranties, deed of appointment for the Independent Certifier) together with any additional acts and instruments required to give effect to the project; and

b. undertake any acts necessary to give effect to the project

3.28 That the Director Resources & Performance be authorised to sign and issue a certificate under the Local Government (Contracts) Act 1997 in respect of the PFI Contract and associated documents and to approve the relevant discharge terms in respect of that certificate;

3.29 That the County Council’s Chief Legal Officer (and in her absence the Assistant Chief Legal Officer (Environment & Property Law) be authorised to execute the agreements or documents as are required to give effect to the decisions in this report, so far as such power is not already delegated by the county council’s Constitution.

At the request of M J Frearson and S J Taylor, it is recorded that they voted against the recommendations.

4 EXCLUSION OF PRESS AND PUBLIC

Decision

4.1 The Panel agreed that under Section 100(A)(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A to the said Act and the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

PART II (‘CLOSED’) AGENDA 1. HERTFORDSHIRE WASTE PROCUREMENT PROGRAMME

(Officer contact: Bryony Rothwell Tel: 01992 588350)

The decision reached in Part II business in relation to this item is recorded in the Part II Minute.

KATHRYN PETTITT CHIEF LEGAL OFFICER

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